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  1. ITV Report

Rolls-Royce slumps to record loss of £4.64bn

The British manufacturing giant is worth £13bn Credit: PA

Engine maker Rolls-Royce has revealed it slumped to a record loss of £4.64 billion in 2016.

It was hit by the weak pound and a £671m corruption fine, the company said.

On an underlying basis, it reported pre-tax profits of £813m - nearly half the £1.4bn recorded in 2015.

The company said it was on track with efforts to slash costs and is expecting a "modest" performance improvement in 2017.

Commenting on the results, Warren East, Chief Executive, said: “Despite the significant market and aerospace product transition challenges identified in 2015, we have made operational progress and performed ahead of our expectations for the year as a whole.

"While we have made good progress in our cost cutting and efficiency programmes, more needs to be done to ensure we drive sustainable margin improvements within the business.”

The huge annual loss follows a tough past few years for Rolls after a string of profit warnings and last month's corruption fine to settle a case brought by the Serious Fraud Office (SFO) and authorities in the US and Brazil.

Sir Brian Leveson said on handing down his written judgment in January that the long-running probe revealed "the most serious breaches of the criminal law in the areas of bribery and corruption".

Rolls will pay the £671m fine over five years, with a £293m payment this year, but has taken the full cost as an impairment charge against 2016 profits.